Online contracting today provides the opportunity to improve business with svelte business models. It builds on long term developments which will continue to change the way goods and services are traded.

template terms of service

Process flow taking a user into acceptance of an online contract

Traditionally there were fewer suppliers and offerings (ie products and services), hence contract negotiations were often extended as the parties gathered information and then haggled. In pre-contract tasks they needed to communicate and record what was available, what price was sought, when goods could be supplied and so on. This involved in-person meetings, diary notes, telephone tag, faxes and more recently email threads and instant messaging.

In contrast, now in many markets there are more suppliers and offerings. This is thanks to the forces of globalisation, digitally connected business processes and other factors. From this, and use of the web as the world’s desktop, in recent years it became viable for many suppliers to make an online offering of products or services to prospective customers who could EITHER instantly accept the offering on the basis of the associated in-house standard online contract OR go somewhere else for alternatives.

The design of this svelte business model for online contracting delivers vast savings. It requires no paper, no signature, no negotiation, and no artefact on which to record the date of the contract and the names of all parties.

Just like email made most snail mail redundant, similarly online contracts are replacing many traditional forms.

The conventions of traditional contracting invite negotiation in meetings, calls, emails or other ways. Online contracting discards these conventions producing significant savings.

Online contracting applies a “take it or leave it” svelte business model. It reduces overheads by automating processes, aligns systems in a supply chain, and reduces management tasks.

To gain from all this a business must already have in place or plan to have web presence and an e-commerce system. To become svelte what has to be researched is what a specific business does, for who, how, and adding what value for each party.

how to draft an online contract

Growth of internet users 1993 to 2014 worldwide

What eBay, PayPal, Apple and others popularised and makes them billions is now being adopted by a wider range of big and small businesses in Australia seeking to not just get sales and reduce overheads, but become so frictionless and efficient that they skyrocket in popularity. This is evident with mobile app businesses since the mid-2007 release of the first iPhone.

Online contracts come in many types. They include online terms of service governing the purchase of products or services; managed services agreements used by utilities and service providers; and transaction-specific online contracts for e-commerce. We’re grouped them all here under the term “online contracting”, synonyms include cloud contracting and e-commerce contracts.

Online contracts take the traditional five or seven “elements” or requirements for forming a contract under contract law and treat them in ways suited to the online environment and acceptable to law in Australia and numerous other jurisdictions.

To achieve this simplicity required many changes since the 1990s when online contracting first appeared. Contract law evolved towards acceptance of online contracting; many business processes were digitised removing printers and person-to-person meetings and communications; software became even more user-friendly with Web 2.0 technologies; and PCs, the internet (see above graphic from www.internetlivestats) mobile devices and cloud computing proliferated.

Change is escalating, we are in its early stages.

Contact us with any questions or requests.

Noric Dilanchian